Grandich slips market manipulation into MarketWatch daily gold report

By Polya Lesova
MarketWatch.com
Tuesday, July 17, 2007

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7bE55F69D0-78FB-4...

NEW YORK -- Gold futures struggled to find a foothold in positive territory Tuesday, though ongoing dollar weakness and near-record oil prices underpinned prices.

Gold for August delivery rose 30 cents at $666.60 an ounce on the New York Mercantile Exchange.

"Echoes of Monday's declines and the ongoing economic data waiting game kept prices under pressure for a second day," said Jon Nadler, analyst at Kitco Bullion Dealers, in a morning note.

Gold futures fell $1 Monday to close at $666.30 an ounce, pulling back after reaching a high of $669.50 during the regular session and a $670.50 high in electronic trading.

"While gold's rally over the past two weeks has lifted the metal out of its recent down channel, the metal has yet to see the surge of demand that many were expecting, given the recent dollar weakness and inflationary energy movements," said James Moore, analyst at TheBullionDesk.com, in a research note.

Crude-oil futures rose sharply early Tuesday to trade near $75 a barrel, as bullish sentiment dominated the market.

On the currency markets, the British pound rallied to a new 26-year peak against the dollar. The greenback edged higher against the yen, but remained lower against major European currencies.

"Despite an onslaught of increased bearishness and some highly suspect capping trading patterns on the Comex, gold has managed to more than hold its own during its weakest seasonally favorable period," said Peter Grandich, editor of the Grandich Letter, in emailed comments.

"The big surprise in coming days could be a major break above key resistance in the $670-$675 area," Grandich said.

In addition to Tuesday's PPI and industrial production data, the attention of most traders remains focused on Wednesday's CPI data and Federal Reserve Chairman Ben Bernanke's testimony in front of the House Financial Services Committee and the Senate Banking Committee on Wednesday and Thursday, Nadler said.

Wholesale prices fell 0.2% in June as food and energy prices declined after four months of hefty increases, the Labor Department reported Tuesday.
The producer price index fell for the first time since January, confounding economists' expectations for a 0.2% increase in prices for goods at the wholesale level.

Also on Nymex Tuesday, other metals prices fell. September silver shed 4 cents at $13.025 an ounce, September palladium fell $2.70 at $367.50 an ounce and October platinum fell $7.60 at $1,319.50 an ounce. September copper fell 1.45 cent at $3.5475 a pound.

Gold warehouse inventories were unchanged at 7.13 million troy ounces as of late Monday, according to Nymex data. Silver supplies rose to 137 million troy ounces, up 596,827 troy ounces, while copper supplies dropped 134 short tons to stand at 21,494 short tons.

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